8th October 2020
Lloyd’s CEO John Neal has said he expects to sign off on business plans allowing the market to grow by between 12% and 13% in 2021 and write up to $15bn of new business.
The CEO was speaking as part of Aon’s fireside chat series of interviews with top (re)insurance executives.
Neal also said he was confident the market would perform within expectations in 2021, and there was scope for growing both exposure and pricing.
The overall growth forecast is an upwards revision of a recent prediction Neal made of high-single-digit growth next year, though the new business forecast is at the low end of a £12bn-£13bn ($15.5bn-$16.8bn) range he previously cited. The comments come as the business planning process continues between Lloyd’s and syndicates.
Lloyd’s gross written premium in 2019 was £35.9bn.
Neal added that the Covid-19 pandemic had enhanced the importance of Lloyd’s physical presence.
“I think the physical location has perversely become more important, not because we can’t trade without it, but because that ability to connect in certain circumstances and certain instances is critical,” he explained
“And as real estate footprints reduce in the major cities, I think having a legitimate location where people can meet for the purposes of doing insurance has just gone up actually.”
The Lloyd’s leader noted that the insurance industry had got off to a “slow start” at the beginning of the pandemic and found itself on the back foot in the media.
“We found ourselves in a similar position I think the banks did in the financial crisis, people feeling disappointed or frustrated that either there wasn’t cover in force or that they thought there might have been cover but the cover wasn’t there,” he said.
He commented that the pandemic experience had proved a “wake up call” for insurers to consider protecting intangible assets on companies’ balance sheets.
Quizzed on broker consolidation, Neal said he thought Aon and Willis Towers Watson would flourish following their merger and improve the broking market.
“I think it will lift the standards and that must be net net good,” Neal said.